The Gas Authority of India Ltd(GAIL), later rechristened as GAIL (India) Ltd, today formally commenced a deserving celebration of its Silver Jubilee Year with the release of a special commemorative postage stamp in the national capital by none other than the President of India at Rashtrapati Bhavan. Last 25 years have been a chequered history for this Navaratna PSU under the Ministry of Petroleum & Natural Gas.

GAIL crossed several mile-stones during this period, making a significant contribution the cause of nation’s development. It helped harness new resource of energy called natural gas, which has since gained a lot of popularity. Being an efficient fuel or an industrial raw material, industries crave for gas supply and as a very environment friendly source of energy, helps keep pollutants low. GAIL pioneered laying solid gas pipeline network to facilitate carrying natural gas to far-off corners of the country leading to mushrooming of industries along the way. It set-up petrochemical plant, LPG plants, and introduced CNG supplies to vehicle and piped gas supply to houses at the mere turn of a tab just as water supply.

Here is an account of the company’s major milestones achieved since inception.

ROLE OF GAIL IN INDIAN ECONOMYServing the NationThe setting up of GAIL (India) Limited, formerly known as Gas Authority of India Limited in August, 1984 heralded a new era of natural gas in the country. GAIL is now completing 25 glorious yeas of service to the nation. Since 1984, GAIL has made significant contributions to the nation’s economy by supplying natural gas through its pipeline network for: • Generation of over 87,000 MW of power.• Production of over 145 million tones of Urea;• Production of LPG for over 7 crore households in the country.• Over 5.75 lakh vehicles in the country today running on CNG supplied by GAIL and over 7 lakh households on Piped Natural Gas (PNG) in the country• Production of petrochemicals of around 400,000 MTs which is used in the plastics industry GAIL enabled the use of natural gas as a new energy resource in the country, which was earlier being flared in the offshore fields of Bombay High.

The natural gas infrastructure of around 7,000 km. accounting for over 82% of the total pipeline infrastructure in India, set up so far by GAIL has contributed enormously to the economically and socially critical sectors such as fertilizers and power. GAIL also has the distinction of pioneering the clean fuel revolution for transport sector in the country with the introduction of CNG in Delhi and Mumbai which has significantly helped in reducing pollution levels in these two cities. The pipeline network of GAIL supplies natural gas to various sectors equivalent to 204 million barrels of oil equivalent per year, thus not only contributing to import substitution but also providing environment friendly fuel.

The natural gas infrastructure of GAIL plays a significant role in serving the nation by facilitating equitable geographical distribution of economic benefits. It provides ready market access to the domestic gas producers, making gas available to the customers including those who are remotely located, facilitating monetization and development of gas fields which are otherwise scattered and devoid of market access. The pipeline network has created choice for customers by providing cheaper, environment-friendly alternative fuel and has reduced import-dependency as natural gas has substituted liquid fuels such as Naphtha, fuel oil, etc.

GAIL has also spearheaded the spread of City Gas and Piped Gas network in the country which has helped in bringing down pollution levels in metros such as Delhi and Mumbai.GAIL’s pipeline network caters to the gas consumers in the states of Gujarat, Maharashtra, Rajasthan, Madhya Pradesh, Delhi, Haryana, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Assam and Tripura. In addition to supplying Natural Gas to various consumers, GAIL has also set up 7 LPG plants and a Petrochemical plant to extract value added products from gas.GAIL produces around 1.35 MMTPA of Liquid Hydrocarbon including LPG for domestic consumption. GAIL is now an integrated energy company along the natural gas value chain with global footprints.

Today, GAIL has interests in the business of natural gas, LPG, liquid hydrocarbons and petrochemicals, the latter being value-added products. The Company has also entered in telecom sector by leasing bandwidth available through the OFC which is laid along the gas pipelines for their operation and maintenance. GAIL has also diversified into exploration & production, city gas distribution and is steadily developing an overseas presence.

In the area of corporate social responsibility, one of the major projects of GAIL has been setting up of Air Pollution Related Disease Diagnostic Centres (APRDCs) in over 20 cities in various parts of the country, at a cost of about Rs. 4 crore. Under this programme, the diagnostic centres equipped with modern diagnostic amenities related to respiratory and cardio-vascular diseases and well trained medical personnel have been set up in partnership with reputed Government / trust managed hospitals / institutions to provide diagnostic facilities and treatment to the people who are not able to afford baseline investigations for diagnosis. APRDC also works as R & D for development of facilities for diagnosing suspended particles, which are known to cause acute heart diseases.

In more recent times, GAIL has initiated steam conversion project based on waste heat recovery system from GAIL’s gas turbines. This rare, multi-benefit project would not only utilize clean development mechanism (CDM) for power generation, but also lead to conservation of gas as well as increased energy efficiency. GAIL has a consistent track-record of dividend payment. So far, GAIL has disbursed dividend of Rs.6,230 crore to the shareholders including Government of India, which is more than seven times the original investment of Rs. 845.65 crore by the Government in its equity capital. Further, the Government has been disinvesting its shareholding in GAIL from time to time, bringing down its equity holding to 57.345 percent and thereby contributing to the exchequer an additional amount of Rs. 3,400 crore. International credit rating agency, Moody’s have assigned a Baa2 indicative foreign currency debt rating (1 notch above the sovereign foreign currency rating) and A3 local currency issuer rating (5 notches above the sovereign local currency rating) to GAIL (India) Ltd.

Background

The history of GAIL (India) Limited, erstwhile Gas Authority of India Limited, is closely aligned to the growth of the Petroleum Industry in India.Till the mid eighties, state-owned Public Sector Undertakings in the Upstream & Downstream Segments were concentrating on effective sourcing and utilization of the oil resources of the country. ONGC had already made important gas discoveries in the western offshore – South Bassein fields which could not be utilized in absence of gas piping infrastructure. The Government embarked upon a planned and focused development of the natural gas sector in the country.

Beginning- Hazira-Vijaipur-Jagdishpur (HVJ) Pipeline Project
Entrusted with the responsibility of executing, operating and maintaining one of the largest natural gas pipeline projects in the world, GAIL built the 1800 km. long cross country Hazira-Vijaipur-Jagdishpur (HVJ) Pipeline at a cost of Rs. 1700 crore. It gave the Company a firm foundation to build on its capabilities and successfully take on project after project.

The Challenge of Initial years- HVJ Pipeline being the first project of its kind in the country, the timelines were stiff. The challenges included difficulties entailed in getting the project started like obtaining clearances, design parameters, documentation, finalizing global bids, setting up of basic infrastructure, long isolated stretches, 92 river crossings, 50 km. of forest, 221 land crossings, 450 km. of rocky terrain and 350 road crossings, across difficult terrains.

The HVJ pipeline network with a capacity of 18.2 MMSCMD was laid with the objective of transporting gas to Fertilizer, Power, LPG, Petrochemical plants and other industrial consumers in Gujarat, Madhya Pradesh, Rajasthan, Uttar Pradesh, Haryana and Delhi.

India, which was dependent on imports for around 40% of its fertilizer needs before HVJ came, was now almost self sufficient in its needs of fertilizer. Next major consumer was the power sector. Once the natural gas was introduced in this sector and was well accepted due to its benefits such as clean fuel characteristics, smooth handling, high efficiency, etc., its market in other sectors / industries also started developing gradually. In due course of time, the demand for natural gas grew tremendously and with it, the pipeline infrastructure has been expanded to cater to the demand.

Reaching Milestones one after anotherGas Rehabilitation and Expansion Project (GREP) In 1998-99, the capacity of HVJ Pipeline was expanded to 33.4 MMSCMD under the Gas Rehabilitation and Expansion Project (GREP) by construction of a loop line of 505 km. from Vijaipur to Dadri and increasing compression capacity of existing compressor stations and adding 2 more compressor stations at Vaghodia and Khera.

Pipelines in K.G Basin & Cauvery BasinGAIL is operating a Pipeline network of 830 km in K.G. Basin in the state of Andhra Pradesh. This includes main grid pipelines like Tatipaka-Kakinada to Nagarjuna Fertilizers crossing the country’s largest river crossings of Gautami & Godavari rivers and Tatipaka-Narsapur-Kovvur pipeline. Other pipelines include 204 km. pipeline to LANCO power project, Kakinada - BSES Pipeline to supply gas to REL power plant, etc. Natural gas is also available from gas fields in Cauvery Basin in the state of Tamil Nadu. GAIL is operating 260 km. of pipelines to make this gas available to the customers in the remote areas.

Pipelines in North-East Region GAIL is also operating 69 km. regional pipelines in Assam and Tripura. The pipelines existing in Assam supply gas to GAIL LPG plant and ASEB. In Tripura the pipelines are connecting ONGC gas fields at Agartala dome, Rokhia and Konaban. GAIL is also supplying natural gas to Tripura Natural Gas Company Limited.

Pipeline in Rajasthan GAIL laid the first pipeline in the country in desert area from Gamnewala up to Ramgarh to supply gas to RSEB’s power plant. 66 km Dandewala - Gamnewala – Ramgarh pipeline has been laid which supplies gas to RSEB.

Pipelines in Gujarat Gujarat has huge resources of natural gas. GAIL has laid pipelines in North Gujarat and South Gujarat regions to supply gas to consumers which include power plants, fertilizer plants and other industrial units. In North Gujarat, GAIL supplies gas to AEC, Ahmedabad, REL and other consumers through 145 km pipeline network. In South Gujarat, GAIL operates 257 km pipeline network in Baroda region and 252 km in Bharuch region. Major customers include NTPC Jhanore, GNFC Bharuch, GEB Dhuvaran, GEB Utran, etc. Re-gasified LNG is also being supplied to consumers in the region through these pipelines.

Dahej-Vijaipur Pipeline (DVPL) GAIL laid down 610 km Dahej-Vijaipur pipeline to supply re-gasified LNG from India’s first LNG terminal at Dahej to consumers in Western and Northern India. This pipeline of 23.9 MMSCMD capacity was commissioned in March 2004, 6 months ahead of schedule. International Project Management Association (IPMA) adjudged DVPL project as winner of “Silver Medal” in Mega Projects category in IPMA World Congress Meet-2006 in China.

Other Pipelines along HVJ Further expansion of HVJ network consisted of laying pipelines for augmenting the gas supplies to existing as well as new consumers. 139 km pipeline from the HVJ at Thulendi to Phulpur in Uttar Pradesh has been laid, which caters to Fertilizer and industrial consumers around Rai Bareli. Another pipeline from Vijaipur to Kota (192 km) has been laid to address the natural gas demand by Fertilizer, City Gas & industrial consumers around Kota.

GAIL has also laid 85 km Kelaras-Malanpur pipeline to supply RLNG to customers in Malanpur Industrial area near Gwalior. Another pipeline from Jagoti to Pithampur (98 km) has been laid with 21 km spur line to Dewas. This pipeline caters to the demand of gas supply to consumers in Dewas and Pithampur industrial areas and will also supply city gas at Indore.

Dahej-Dabhol Pipeline (DUPL & DPPL)
GAIL recently completed the 587 Km long Dahej-Dabhol Pipeline Project which is a landmark achievement in pipeline project execution, not only in India but also internationally. The project was completed without any cost overruns and in a very tight time schedule despite several challenges. The completion of this project was of utmost national significance as it has not only brought the Dabhol Power Project back to life but also provided needed connectivity across key consuming markets.

National Gas Management Centre
GAIL established a world class National Gas Management Centre (NGMC) with an objective of round-the-clock marketing and control of transmission assets of the Company from a single location. NGMC deals with GAIL’s natural gas transportation and LPG transmission business throughout India in which live data is available at a centralized location for monitoring of pipeline and delivery condition of all major customers’ terminals.

National Gas Management Center, which is the first of its kind for the gas business in India, encompasses management of entire GAIL’s gas trading, transportation and LPG transmission business throughout India with the availability of live data at centralized location for monitoring pipeline parameters, delivery conditions at all major customer terminals, gas reconciliation and accounting for entire gas business.

To ensure efficient real time management and gas nominations, delivery and allocation with accurate gas reconciliation, a Gas Management System (GMS) is also available in NGMC. GMS is a web enabled system, which integrates all the shippers, suppliers, customers and transporter of gas to provide better co-ordination and transparency in Gas Transportation business.

Joint Ventures and Subsidiaries
Apart from its area of direct operations, GAIL has formed joint venture companies for City Gas Distributions and Petrochemicals. For CNG, the JVs include Joint Ventures overseas while for petrochemicals, currently GAIL has two joint ventures in the country and is scouting for one overseas.

City Gas Distribution
GAIL has already set up eight joint venture companies for City Gas Distribution which are catering to the needs of domestic and transport sector of the cities, besides industrial and commercial consumers. GAIL has ambitious plans to expand its presence in this space in the next 4-5 years. Hence, GAIL is today an integrated energy company in the hydrocarbon sector with focus on gas and beyond as reflected in its Vision statement. Recently GAIL has set up a wholly owned subsidiary GAIL Gas Limited for further expansion of its CGD and future Gas Retailing business.

LNG Import
To ensure long-term gas-supply security from multiple natural gas sources, the company has integrated into import of LNG through Joint Ventures / Equity Participation route. GAIL has played key role in the growth of LNG markets in the country. GAIL has a 12.5% stake in Petronet LNG Limited, which owns and operates India’s first LNG regassification terminal at Dahej, Gujarat. The capacity of the terminal is shortly scheduled to increase to a level of around 12 MTPA. Long term LNG tie-up with RAS gas, Qatar has already been made for 7.5 MMTPA. This co-promoted company is establishing another LNG terminal at Kochi, Kerala by 2011-12. In addition to above, GAIL has participated in a SPV, Ratnagiri Gas & Power Private Limited (Dabhol) with equity stake of 28.33 percent with a view to source LNG and operating LNG Re-gasification terminal. This Terminal shall have a re-gasification capacity of 5 MMTPA of which 2.1 MMTPA shall be used by Power Plant at Dabhol and the remaining shall be used for merchant sale to consumers.

Overseas Operations
GAIL has equity participation in three retail gas companies in Egypt and in China Gas Holdings in China, participating interest in offshore blocks in Myanmar and one onland block in Oman. GAIL is pursuing business opportunities in regions such as South / South-East Asia, West Asia, Russia and Central Asian Republics and African continent in the areas of exploration and production, gas transmission, CNG and city gas distribution, LNG and petrochemicals. GAIL has set up a wholly- owned subsidiary company viz. GAIL Global (Singapore) Pte. Ltd. in Singapore.

Contribution of Subsidy
In order to make LPG affordable to common man, GAIL has been contributing in terms of subsidy since the year 2003-04. The total subsidy contribution by GAIL has been to the tune of Rs. 6,566 crore.

Conclusion
Natural gas infrastructure developed by GAIL over the years has touched the life of common man in many ways, be it social, economic, or environmental aspects. The development has not only supported various industrial segments like power, and fertilizer, but also helped to further expand and meet the demand in these sectors. It has also helped in improving the quality of life in the alarmingly polluted cities like Delhi, Mumbai Agra & Firozabad etc. In addition to the direct, the indirect benefits as a result of these infrastructural developments by GAIL, has helped social development in the rural areas by extending basic amenities. The overall contribution to the nation has been truly remarkable. With its robust future plans, GAIL is committed to build a green future for India.